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Post by papitohead on Jul 12, 2016 12:43:49 GMT -5
You know, Colombia would benefit from expats with a pension from outside Colombia. We do not need a job from Colombia, thus, Colombians will have our jobs, we will spend our pension in Colombia instead of else where. But if we have to pay taxes on something I paid all my life, then I will sponge as a tourist and pay nothing. Is the gov aware of this? Time to change the law, huh.
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Post by scumbuster on Jul 12, 2016 12:46:03 GMT -5
Its $12,751 to require to file. Level you must pay taxes? not sure but I still have a little over 2 years before I have to worry about it. Have to see where we are in 2 years.
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Post by livinginmedellin on Jul 12, 2016 13:11:55 GMT -5
Colombia is very lenient in permitting deductions for expanses related to earning your income. Also can deduct payments towards Colombian health insurance (up to a limit), deduct for dependent support (up to a limit), there's a retirement savings contributions deduction (up to a limit), plus an exemption of 25% of your salary that is exempt from taxes,
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Post by papitohead on Jul 12, 2016 13:47:11 GMT -5
Very screwy for sure. Not the friendly short/long forms at the states. I do get a little over $2k per month for SS. So let's put it $25k per year. In other words, I am already half screwed. If I deduct the limit scumbuster posted of $12.7k then I have to pay 30% of the difference which would be $12.3k(.30) or $3,690. If I am going to live most of the time in Colombia I need to find a good loophole or I will be the part timer I have been for the last 9 years.
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Post by gallito on Jul 12, 2016 13:53:55 GMT -5
Tourist visa - 6 months or less...keep it simple!
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Post by livinginmedellin on Jul 12, 2016 15:44:15 GMT -5
Very screwy for sure. Not the friendly short/long forms at the states. I do get a little over $2k per month for SS. So let's put it $25k per year. In other words, I am already half screwed. If I deduct the limit scumbuster posted of $12.7k then I have to pay 30% of the difference which would be $12.3k(.30) or $3,690. If I am going to live most of the time in Colombia I need to find a good loophole or I will be the part timer I have been for the last 9 years. I plugged that $25k in income into a simple Colombia tax calculation spreadsheet I created and assumed the max deduction for a dependent (10.859 million pesos), a 4 million pesos deduction for payment for upscale healthcare insurance in Colombia, and assumed you can exclude 25% of that $25k from being taxed like you can with a salary (not sure if you can though) and the total tax I came up with was only $807 for last year. Note that Colombia has progressive income tax rates like in the U.S. on your taxable income. The first tax bracket goes up to 30.8 million pesos with a tax rate of zero. The 19% tax bracket is next going from about 30.8 million to 48 million pesos. The 28% tax bracket goes from about 48 million pesos to 115.9 million pesos and the final tax bracket is 33% for amounts above 115.9 million pesos. It is best to talk to a tax professional to find out all the tax implications for your situation and what deductions you can use and estimate what taxes you will need to pay, if any. According to my accountant many of her expat clients pay little or no income taxes in Colombia as you can subtract taxes paid in another country from your taxes due in Colombia.
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Post by elexpatriado on Jul 12, 2016 16:14:03 GMT -5
You mean they can tax my social security? They know I receive and how much because my first visa was a pensionado visa. Colombia government should be glad just because we spend our retirement money there. Taxing something we do not earn in Colombia would drive expats out. Yeah, no kidding,and then the multi national corps. I talked to all types of people working here ..teachers, investors, professionals and they just laugh at this stuff and say they are gonna leave if they try anything. They wanna play "HardBall" like Venezuela did , they suffer the same consequences. If they do start, they will go for the "Low Hanging Fruit"..The ones with assets like houses, cars, business, bank accounts here they can "Embargo".. The FARC work the same way, thats why they dont often go after people who have no assets in the country.. And you shouldnt sleep softly if you did a "Declaration "De renta" ..only more info. for them to nab you,,like telling the Ladrone in the Calle you have 500 mill pesos in your pocket before he even thinks about robbing you..if they are smart enough or greedy enough to start such stupidity..
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Post by sedelen on Jul 13, 2016 19:44:24 GMT -5
Wow, What a friggin bummer! And what if you have two pensions? Whoa! They should have goodwill ambassadors serving you coffee and donuts and treating you like royalty for all you're expected to pay.
And they talk in terms of "pesos" at the "current" exchange rate I presume? And with what I've seen in the posts, there's some potentially serious money being talked about here. And should you not have any deductions, like me, you'll really be raked over the coals.
And all Kathleen Peddicord's International Living articles never mention the fact that they will rob you blind when she talks about living here comfortably on your measly Social Security checks.
I see my dream of living here dying. I can see why some folks returned to the States after getting knocked in the head with the reality of having to pay taxes here and in the States also, unless you don't make enough to report, as many people have told me. And potentially be liable for lots of taxes, for what? For the opportunity to live here? Most of us don't even earn money here, at least I don't. Can't with a TP-7 Visa.
Anyone want to buy a car? just kidding.
I did find out that mid September was the deadline to file.
I assume in time there will be a coordinated effort to identify those who live here and those that have and haven't paid, or at least filed. They have the information already needed to do that.
I found this from another post somewhere, What's noteworthy is the note stating, "Please note the penalty fine for failure to accurately report can be assessed by the "DIAN" at an amount of 5% of the value of the asset that was omitted from or under-valued in the form." Money in U.S. banks, anyone? Brokerage accounts, stocks and bonds, IRA's? They are after all, assets that have value, even if they're just sitting around bidding time.
home.kpmg.com/xx/en/home/insights/2015/09/flash-alert-2015-115.html
I was thinking though, I wonder if they use your Social Security Number? That, I don't think I will give up under any circumstances.
Looks like "Less" is "More" The less you have, the more worry free you can be, at least here in Colombia. I might have to become a tourist again.
My rant is done! Thanks for all the inputs.
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Post by papitohead on Jul 13, 2016 20:30:35 GMT -5
The more I read, the more I know I have to think this over real good. I can stay here in PR and keep living my life. Just that the wife wants to live in Colombia. So I just go a visit and keep studying the situation.
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Post by livinginmedellin on Jul 14, 2016 8:08:24 GMT -5
Wow, What a friggin bummer! And what if you have two pensions? Whoa! They should have goodwill ambassadors serving you coffee and donuts and treating you like royalty for all you're expected to pay.
And they talk in terms of "pesos" at the "current" exchange rate I presume? And with what I've seen in the posts, there's some potentially serious money being talked about here. And should you not have any deductions, like me, you'll really be raked over the coals.
And all Kathleen Peddicord's International Living articles never mention the fact that they will rob you blind when she talks about living here comfortably on your measly Social Security checks.
I see my dream of living here dying. I can see why some folks returned to the States after getting knocked in the head with the reality of having to pay taxes here and in the States also, unless you don't make enough to report, as many people have told me. And potentially be liable for lots of taxes, for what? For the opportunity to live here? Most of us don't even earn money here, at least I don't. Can't with a TP-7 Visa.
Anyone want to buy a car? just kidding.
I did find out that mid September was the deadline to file.
I assume in time there will be a coordinated effort to identify those who live here and those that have and haven't paid, or at least filed. They have the information already needed to do that.
I found this from another post somewhere, What's noteworthy is the note stating, "Please note the penalty fine for failure to accurately report can be assessed by the "DIAN" at an amount of 5% of the value of the asset that was omitted from or under-valued in the form." Money in U.S. banks, anyone? Brokerage accounts, stocks and bonds, IRA's? They are after all, assets that have value, even if they're just sitting around bidding time.
home.kpmg.com/xx/en/home/insights/2015/09/flash-alert-2015-115.html
I was thinking though, I wonder if they use your Social Security Number? That, I don't think I will give up under any circumstances.
Looks like "Less" is "More" The less you have, the more worry free you can be, at least here in Colombia. I might have to become a tourist again.
My rant is done! Thanks for all the inputs. Kathleen Peddicord is no longer with International Living - she has her own publication - Live & Invest Overseas. You should never trust any information from these biased retirement publications that hype overseas locations without adequately discussing the downsides. These retirement publication are definitely not tax experts for the 15-20+ countries they recommend so I wouldn't trust anything regarding taxes from them - do your own due diligence. Mid September is not necessarily the deadline to file income taxes in Colombia. It could be as soon as August 9th. The deadline is defined based on the last two digits of your NIT (Colombia tax number). If you don't have a NIT you won't know your deadline. The deadlines for filing income taxes in Colombia run from August 9 until October 19 based on the last two digits of your NIT - here's the dates: www.salariominimo2016.com/fecha-declaracion-de-renta-2016-personas-naturales-e-independientes/My Colombian accountant told me the penalty for not filing is 5% of the tax due or a minimum penalty for not filing of 282,790 pesos if no taxes are due. But I found just this from Deloitte with more details that says the penalty is 5% per month or even more for late filing (see penalties on page 2): www2.deloitte.com/content/dam/Deloitte/global/Documents/Tax/dttl-tax-colombiahighlights-2016.pdf. "Late filing penalties amount to 5% per month of delay, up to 100% of the tax or withholding tax due. The penalty increases to 10% per month, with a 200% ceiling, for late filing. Late payment interest also is charged." So according to Deloitte, the late filing penalty in Colombia could be up to 200% of the tax due. If there is a coordinated effort to identify foreigners who live here and those that have and haven't paid, or at least filed income taxes - Colombia could collect big penalties in addition to the taxes due.
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Post by scumbuster on Jul 14, 2016 13:29:25 GMT -5
Well for people with no ties to Colombia and no bank accounts or property, you don't need to worry about it and always move to greener pastures if they are nocking at your door. But if like most here, you have family ties, bank accounts and property it isn't worth that problems it can create. Those penalties and fines could be a back breaker for someone. I always looked at it as being on an extended vacation, and I have never had an income when living in Colombia. I was living off savings like I was on vacation. But once a pension and SS start its a whole other ball game. A 401K might workout ok as you only draw out what you need and can control your own destiny of paying taxes by how much you take out each month or year.
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Post by livinginmedellin on Jul 14, 2016 15:43:29 GMT -5
One solution for Colombia for all those deadbeat expats living in Colombia but not filing taxes when they are required to and some likely tax evaders - simply require a copy of a Colombian tax return for a visa renewal or certification from an accountant if not a taxpayer and not required to file. Unless you are filing tax returns or proving you don't have to - no visa renewals...
They already do this as a requirement for becoming a citizen.
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Post by wendymor on Jul 14, 2016 16:27:04 GMT -5
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Post by livinginmedellin on Jul 14, 2016 17:09:00 GMT -5
Nickel and dime retired foreigners? Not all are retired folks with limited incomes. I have met several wealthy foreigners in Medellín and Bogotá that don't file taxes and even brag about it...
I'm not a fan of tax evaders - Colombia definitely needs the tax revenue - much more then the U.S.
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Post by scumbuster on Jul 14, 2016 17:30:00 GMT -5
Maybe if I have them funnel my SS through a Panamanian bank I will be ok.
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Post by wendymor on Jul 14, 2016 18:06:56 GMT -5
One solution for Colombia for all those deadbeat expats living in Colombia but not filing taxes when they are required to and some likely tax evaders - simply require a copy of a Colombian tax return for a visa renewal or certification from an accountant if not a taxpayer and not required to file. Unless you are filing tax returns or proving you don't have to - no visa renewals... They already do this as a requirement for becoming a citizen. Yes, you are suggesting nickel and diming foreign retirees ... they have to renew their visa every year. Spend your energy going after the big money.
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Post by scumbuster on Jul 14, 2016 18:23:41 GMT -5
I agree, but in reality will they go after wealthy well connected Colombians or gringos living on SS. Call me cynical but I bet is the gringos.
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Post by sedelen on Jul 14, 2016 19:03:01 GMT -5
Well for people with no ties to Colombia and no bank accounts or property, you don't need to worry about it and always move to greener pastures if they are nocking at your door. But if like most here, you have family ties, bank accounts and property it isn't worth that problems it can create. Those penalties and fines could be a back breaker for someone. I always looked at it as being on an extended vacation, and I have never had an income when living in Colombia. I was living off savings like I was on vacation. But once a pension and SS start its a whole other ball game. A 401K might workout ok as you only draw out what you need and can control your own destiny of paying taxes by how much you take out each month or year. No one wants to live a life of self imposed austerity. You may be young and still preparing for your "golden" years, but when you reach those years, you want to live comfortably and enjoy the fruits of your labors. You don't want to have to concern yourself with everybody's hand in your pocket.
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Post by sedelen on Jul 14, 2016 19:25:49 GMT -5
My girlfriend did talk to a tax consultant who said the last two digits of your Cedula number will determine the deadline for filing. For me it's mid September.
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Post by livinginmedellin on Jul 14, 2016 19:54:17 GMT -5
My girlfriend did talk to a tax consultant who said the last two digits of your Cedula number will determine the deadline for filing. For me it's mid September.
That isn't accurate based on my experience in filing taxes in Colombia. You can't use a cedula to file taxes in Colombia - you must have a NIT issued by a DIAN office. The NIT number is found on a RUT (Registro Único Tributario) form that will be given to you when you go to a DIAN office. You should go to a DIAN office to get a RUT, it doesn't take long and you just need your cedula and a copy of it. Here's the calendar of due dates for filing taxes by last two digits of NIT: www.salariominimo2016.com/fecha-declaracion-de-renta-2016-personas-naturales-e-independientes/
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Post by livinginmedellin on Jul 14, 2016 19:57:16 GMT -5
I agree, but in reality will they go after wealthy well connected Colombians or gringos living on SS. Call me cynical but I bet is the gringos. I am also cynical. Which is easier for DIAN - wealthy well connected Colombians with armies of accountants and lawyers and money hidden in other countries or gringos on SS? Someone in DIAN trying to make quota for increased tax collections may wake up and realize there are a lot of gringos living in Colombia with T-7 retirement visas but they haven't been filing/paying taxes. These retirees already have to disclose SS/pension earnings while applying for a visa so Colombia already has some income info -- easy pickings -- low hanging fruit -- The average monthly SS payment to retired workers in 2016 according to SSA is about $1,341 per month in 2016 - annually that is $16,092, which is higher than the $12,751 income requirement for filing taxes in Colombia.
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Post by sedelen on Jul 14, 2016 21:50:19 GMT -5
My girlfriend did talk to a tax consultant who said the last two digits of your Cedula number will determine the deadline for filing. For me it's mid September.
That isn't accurate based on my experience in filing taxes in Colombia. You can't use a cedula to file taxes in Colombia - you must have a NIT issued by a DIAN office. The NIT number is found on a RUT (Registro Único Tributario) form that will be given to you when you go to a DIAN office. You should go to a DIAN office to get a RUT, it doesn't take long and you just need your cedula and a copy of it. Here's the calendar of due dates for filing taxes by last two digits of NIT: www.salariominimo2016.com/fecha-declaracion-de-renta-2016-personas-naturales-e-independientes/So far, you have provided the most comprehensive information about this matter. I'm thinking perhaps she misunderstood. I'm sure, after getting a VISA, a driver's license, and buying a car, and based on those experiences that what ever it takes will become the most labor intensive task imaginable.
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Post by livinginmedellin on Jul 14, 2016 23:08:10 GMT -5
That isn't accurate based on my experience in filing taxes in Colombia. You can't use a cedula to file taxes in Colombia - you must have a NIT issued by a DIAN office. The NIT number is found on a RUT (Registro Único Tributario) form that will be given to you when you go to a DIAN office. You should go to a DIAN office to get a RUT, it doesn't take long and you just need your cedula and a copy of it. Here's the calendar of due dates for filing taxes by last two digits of NIT: www.salariominimo2016.com/fecha-declaracion-de-renta-2016-personas-naturales-e-independientes/So far, you have provided the most comprehensive information about this matter. I'm thinking perhaps she misunderstood. I'm sure, after getting a VISA, a driver's license, and buying a car, and based on those experiences that what ever it takes will become the most labor intensive task imaginable. I can sympathize - I now have 3 visas under my belt, a marriage in Colombia, experience renting 4 different apartments over 6+ years, moving 3 times and this will be my third time to file taxes in Colombia. Getting the RUT with the NIT number is the easiest part of the tax process. In my experience it takes about 20 minutes in the morning in DIAN's office in the Alpujarra administrative complex. In addition to a copy of your cedula and the original they will also ask for your address, your phone number and for an activity code. The activity code is the type of work you do. A list of activity codes (in Spanish) can be found here: www.dian.gov.co/descargas/normatividad/2012/Resoluciones/Resolucion_000139_21_Noviembre_2012_Actividades_Economicas.pdf. I now understand taxes in Colombia probably well enough to do my own. This year it took me about 8+ hours to collect and organize all the supporting paperwork and calculate taxes myself before going to the accountant.... I'm waiting for the final tax form from the accountant to enable me to file.
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Post by Deleted on Jul 15, 2016 0:18:09 GMT -5
I can't understand Sedelen point: "No one wants to live a life of self imposed austerity. You may be young and still preparing for your "golden" years, but when you reach those years, you want to live comfortably and enjoy the fruits of your labors."
Err so you mean it's ok to pay taxes when you're active, but once retired you shouldn't, because your want to enjoy the fruits of your labors? I'm 20 years from getting retired, I work hard and pay taxes, and just like you, I'd love to fully enjoy the "fruits of my labors". But you know what, I acknowledge I am living in a country, that there are laws, and that I am using this country's public infrastructures that are paid with taxes. And this has nothing to do with my being active or retired.
It's funny how everybody consider themselves as a law abiding persons, but when it comes to paying taxes, they suddenly come with any kind of reason to evade taxation.
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Post by Deleted on Jul 15, 2016 9:19:45 GMT -5
I can't understand Sedelen point: "No one wants to live a life of self imposed austerity. You may be young and still preparing for your "golden" years, but when you reach those years, you want to live comfortably and enjoy the fruits of your labors." Err so you mean it's ok to pay taxes when you're active, but once retired you shouldn't, because your want to enjoy the fruits of your labors? I'm 20 years from getting retired, I work hard and pay taxes, and just like you, I'd love to fully enjoy the "fruits of my labors". But you know what, I acknowledge I am living in a country, that there are laws, and that I am using this country's public infrastructures that are paid with taxes. And this has nothing to do with my being active or retired. It's funny how everybody consider themselves as a law abiding persons, but when it comes to paying taxes, they suddenly come with any kind of reason to evade taxation. I agree 100%, if you owe taxes-file and pay.
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Post by papitohead on Jul 15, 2016 9:37:31 GMT -5
I did mention my SS at around $25K per year, If i file together with my wife who gets $14,400,000 COP per year pension in Colombia, then my taxes may be less. We have no dependents. We have a finca that is worth around $500 millones. No car or anything else. I do have my 401K and some other stocks but no one in Colombia knows that. If I need $ I just transfer some stocks to my bank account and then use the ATM card to draw it.
Can anyone post what is the cut line to pay taxes in Colombia or a joint couple?
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Post by livinginmedellin on Jul 15, 2016 9:55:01 GMT -5
I did mention my SS at around $25K per year, If i file together with my wife who gets $14,400,000 COP per year pension in Colombia, then my taxes may be less. We have no dependents. We have a finca that is worth around $500 millones. No car or anything else. I do have my 401K and some other stocks but no one in Colombia knows that. If I need $ I just transfer some stocks to my bank account and then use the ATM card to draw it. Can anyone post what is the cut line to pay taxes in Colombia or a joint couple? There is no married filing jointly in Colombia - every files separately. FYI a pension in Colombia is exempt from taxes up to a limit. Earlier in this thread I posted the income filing requirements. Paying taxes depends on your situation, which deductions you can use, income level, if you have taxes paid in another country (that can be subtracted from taxes due in Colombia), etc. Lots of variables so not able to determine a cut line.
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Post by papitohead on Jul 15, 2016 10:08:01 GMT -5
I do not pay taxes in the US because I do not withdraw enough from my stocks and 401k. But I pay property taxes in North Carolina and in PR. Not much but a little bit. Also pay taxes in Bolivar where my finca is. Do they have a long and short form? I always do my taxes here. Short form is nothing to it. The long form is harder but with Turbo Tax anyone can do it. I don't think there is anything friendly in Colombia when it comes to income taxes filing. Thus, you are forced to see an accountant. Just that as livinginmedellin is doing, use the accountant a year or two and monitor everything, ask all kinds of questions and learn it good then do it yourself.
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Post by sedelen on Jul 15, 2016 10:42:19 GMT -5
I can't understand Sedelen point: "No one wants to live a life of self imposed austerity. You may be young and still preparing for your "golden" years, but when you reach those years, you want to live comfortably and enjoy the fruits of your labors." Err so you mean it's ok to pay taxes when you're active, but once retired you shouldn't, because your want to enjoy the fruits of your labors? I'm 20 years from getting retired, I work hard and pay taxes, and just like you, I'd love to fully enjoy the "fruits of my labors". But you know what, I acknowledge I am living in a country, that there are laws, and that I am using this country's public infrastructures that are paid with taxes. And this has nothing to do with my being active or retired. It's funny how everybody consider themselves as a law abiding persons, but when it comes to paying taxes, they suddenly come with any kind of reason to evade taxation. I have a TP-7 Visa, I am prohibited from working here therefore, I have no earnings here, just income provided from my working years in the States. Infrastuctures? Possibly, but you pay to use many of those already, such as the tolls I pay on the roads, the fees I pay for the Metro, utilities, those are paid when the bills comes due. Maybe the parks and museums I don't frequent. More possibly for services, like police and military, the paying of government officials, etc.
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Post by livinginmedellin on Jul 15, 2016 10:47:00 GMT -5
Note you can only subtract income taxes paid in another country from income taxes due in Colombia - no other taxes.
The tax form in Colombia is a one-pager but there is a backup spreadsheet that is much longer. I provide all my supporting docs plus a simple spreadsheet I created that calculates my Colombian taxes to my accountant and she does the Colombian return for me. I do my own taxes in the US and have learned enough about Colombian taxes to figure out about roughly what I owe.
But I figure it's best to continue using an accountant in a foreign country as the tax laws change fairly frequently.
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